Lactalis warn of higher dairy prices due to war
Blocked shipments, delayed sales, energy costs drive prices
17 April 2026
2 minute read
By: Lactalis, the world's largest dairy company, said the Iran war had blocked shipments, delayed sales and would lead to higher consumer prices as supply-chain disruptions drive up costs for energy, transport and packaging across its global operations, reported Reuters.
The conflict has forced the group to reroute cargoes away from the Strait of Hormuz, a critical chokepoint for global trade, while some perishable shipments risk spoiling at sea, underscoring how the war is rippling through food supply chains and threatens to push up grocery bills for consumers worldwide.
"We'll need to pass these costs on to our clients. This will be the key issue in 2026," Lactalis Chairman Emmanuel Besnier said during the company's results presentation in Spain.
Cargoes blocked due to Iran war
The increase in prices of Lactalis' products, which include brands such as President, Galbani and Lactel, would be of "a few percents", Besnier said, but far below the 20%-25% rise it had passed on in 2022-2023 in the wake of the energy crisis after Russia's invasion of Ukraine.
World food prices hit a six-month high in March and were set to continue rising, the United Nations Food and Agriculture Organization said.
French Agriculture Minister Annie Genevard on Thursday called producers and retailers to discuss how to share extra costs.
Several cargoes carrying fresh Lactalis products such as butter and cream were blocked at sea or in ports due to the near closure of the Strait of Hormuz and risk being lost if expiry dates are exceeded, Besnier told Reuters.
Lactalis, the world's ninth-largest food group, is trying to divert shipments but faces a spike in demand for alternative transport and a surge in maritime rates, he said.
US, Asian expansion
The family-owned company's revenue reached 31.2 billion euros ($35.30 billion) in 2025, up 2.9% from 2024, while net profit rose to 528 million euros, or 1.7% of sales, from 359 million a year earlier.
Sales were negatively affected by the high rate of the euro, notably against the dollar and the Brazilian real.
Founded in 1933, the group has grown into a global dairy powerhouse with operations spanning cheese, milk, yogurt, butter, cream and infant nutrition.
Lactalis purchased General Mills' yogurt business in the US last year, including brands such as Yoplait, allowing it to become the third-largest player on the US fresh dairy market. The Americas' sales topped 10 billion euros for the first time last year.
Earlier this month, Lactalis closed the acquisition of Fonterra's global consumer business for NZ$4.22 billion ($2.48 billion), which should enable it to double activities in Asia and Oceania.
Acquisitions pushed debt to a three-year high of 6.3 billion euros in 2025 and will continue to weigh in 2026, limiting appetite for other takeovers in 2027, Besnier said.
($1 = 1.6987 New Zealand dollars)
